Tom McKiver/The Mirror
Fairfield is currently facing a $4.3 million budget gap for the current fiscal year of 2012, according to senior University administrators. A solution of potential cuts and financial changes has accounted for the gap, but details are not yet publicly available.
“Whenever anybody faces a budget gap…there are two ways of dealing with it: increase your revenues, or try to decrease your expense,” Fr. Von Arx said. “Here at Fairfield…we’re trying to do both of those things.”
A student open budget forum was held on Tuesday night concerning the operating budget for the 2012 fiscal year, hosted by President Jeffrey von Arx, S.J., Dr. Thomas Pellegrino, vice president for student affairs, and Julie Dolan, vice president of finance.
Fairfield “realized the issue early in the summer” and has tried to “address it for several months,” Fr. Von Arx said. The ultimate goal in the rearranging of University finances is to have the most minimal impact possible to academics or student experience on campus.
On March 31st of this year, the balanced budget was approved by the Board of Trustees. At this time, there was not a gap in the budget. However, due to changes in the national economy along with the changing enrollment numbers at the University, a budget gap emerged. This gap was discovered already well into the fiscal year, leaving the University in a bit of a bind. Fairfield only has until the end of June – this current fiscal year of 2012 – to fix the problem before entering the 2013 fiscal year.
Undergraduate tuition and fees were budgeted to be $132.2 million, but were actually projected to amount to $128.5 million. Room and board were budgeted to bring in $31.5 million and were projected to actually bring in $31 million, a very minor difference.
83% of the revenues for fiscal year 2012 come from net tuition, room and board, while gifts and endowment comprised 10% of revenue and the remaining 7% were from other sources. Expenses, however, were more significant than revenue this year. 57% of expenses went to compensation (including salaries), and 22% went to other non-compensation areas. Operations and maintenance, interest and depreciation account for 19% of expenses, while 2% go to operations and enrollment contingencies.
As outlined in by Fr. Von Arx during the meeting, there are two ways of dealing with the problem; increase revenue or decrease expenses. Fairfield is attempting to utilize both methods to solve the budget gap.
“Senior leadership has been spending many, many hours grappling with this issue…frankly, it’s not easy,” Dolan explained. “It’s not easy to make that kind of expense reduction without sacrificing things that you really don’t want to sacrifice,” like academics or student experience, she noted.
Pellegrino echoed her sentiments, saying that “every position is vital.” When asked about the impact budget changes will have on students, he said, “I’m hoping it means basically nothing for students,” meaning that the alterations hopefully will not have an impact on student life at Fairfield.
Solving the budget gap problem will be a slow process, and cannot be fixed simply by increasing enrollment – the University must focus on reducing expenses both as a onetime solution specifically this year and as a long-term solution for the future.
“The long-term plan is increasing revenue,” Dolan explained. “Unfortunately, increasing revenues is a slow process, and certainly [on] the kind of scale that we’re talking about here, it’s really not feasible to raise 4.3 million dollars…through increasing undergraduate or graduate programs.”
Fairfield is also hopeful that financial aid for incoming and applying students will not be affected. Fr. Von Arx has been specifically focused on increasing financial aid opportunities for students during his time as University President and is dedicated to continuing this trend. Enrollment goals hover at about 3,200 students overall, although specific yearly enrollment goals vary per year.
Other plans for correcting the budget gap include eliminating vacant positions when possible, considering changes in benefits programs, and combining, reducing or eliminating programs.
“I was very happy with the turnout – I’ve been at budget meetings in years past with very low turnouts, so it’s very satisfying to see student interest in issues that matter in the bigger picture,” said FUSA President Charlie Knights. “All of the questions that students asked were well thought out and hit most of the major points of student concern.”
Leave a Reply